Global inflation concerns keep markets in the red

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Experts say a number of other domestic factors moved the needle the wrong way. Photo: Getty Images
Experts say a number of other domestic factors moved the needle the wrong way. Photo: Getty Images

BUSINESS


The rand remained under pressure against major currencies in overnight trade after retreating on Thursday, backed into a corner by a stronger US dollar.

Co-head of financial markets at ETM Analytics, Kieran Siney, said a number of other domestic factors moved the needle the wrong way.

The rand’s unpredictable nature was on full display yesterday and overnight. While the dollar had popped higher, load shedding resumed, and oil prices rose to erode SA’s terms of trade.

“This was accompanied by disappointing economic data. Activity in the mining sector contracted by -9.3% year-on-year in March, while manufacturing activity decreased by -0.8% year-on-year.”

The rand was 0.41% weaker against the US dollar at R16.01.

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It registered over half a percent loss against the British pound at R19.57. And it was 1.50% lower against the euro at R16.65.

The local bourse was down 1.70% at the end of trade to close at 67 251.89 on Thursday.

Siney said: “The JSE All Share Index tracked the losses in global equity markets yesterday, losing 1.70% on the day as risk appetite deteriorated amid renewed concerns over China and the ongoing war in Ukraine.”

Mining stocks led the losses yesterday, with the likes of Anglo-American Platinum, Sibanye Stillwater and Northam Platinum shedding more than 6%.

US stocks closed in the red on Thursday. The Dow Jones fell for a sixth consecutive day as investors digest the higher-than-expected inflation number in the US this week. While the S&P 500 pushed towards bear territory, after losing about 18% since its peak earlier this year.

The Nasdaq was up 0.06% to 11 370.96.

The S&P 500 was flat and closed at 3 930.08.

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And the Dow Jones Industrial Average was closed lower at 31 730.30.

European markets also closed in the red on Thursday on the back of concerns of lower global growth, increased inflation and geopolitical concerns as the Ukraine and Russia war shows no signs of abating.

The FTSE 100 lost 1.56% to 7 233.34.

The DAX was down 0.64% to 13 739.64.

And the CAC40 also ended in the red, it was down 1.01% to 6 206.26.

Asian stocks were up 1.5% on Friday backed by tech stocks in Japan and in the mainland.

The Nikkei was up 2.54% to 26 402.50.

Shanghai Composite gained 0.67% to 3 075.47.

China’s Hang Seng added 2.02% to 19 772.00.

Brent crude reversed it’s earlier losses and surged to $107.72 per barrel on Thursday.

The increased oil price comes as the EU was reportedly discussing a proposal to ban Russian oil imports to the region.

This move could negatively affect global supplies and see the oil price surge even further.

A weaker rand and increased oil price could result in a hefty increase for food inflation and at the petrol pump next month.

The gold price was down 1.46% to $1 825.89 an ounce.

Silver was down 0.71% to $20.82 an ounce.


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